Friday, October 16, 2020

Government fails to meet revenue mobilisation target of first quarter

 The government has failed to meet the revenue mobilisation target of the first quarter due to slower economy because of the coronavirus impact.

The government has been able to mobilise only Rs 172.36 billion revenue – some 17 per cent of the targeted amount – in the first quarter of the current fiscal year that ended today, though the revenue amount is close to the first quarter of the last fiscal year. In the first quarter of the last fiscal year, the government had been able to mibilise Rs 190 billion in revenue, according to the Financial Comptroller General Office (FCGO). “The revenue government earned during mid-July to mid-October – the first quarter of the current fiscal year – is just Rs 18 billion less than the last year’s first quarter’s realisation of Rs 190 billion.”

The government has revised the target of revenue mobilisation down to Rs 1.01 trillion for the current fiscal year 2020-21, down from Rs 1.11 trillion of the last fiscal year due to possible impact of coronavirus on economy. 

The businesses were completely closed for four months from March 24 hurting the economy. However, after the government itself felt the heat and came short for even to pay salary to the government employees, the government was forced to end the lockdown. The government requested the private sector to resume business activities by strictly following the health and safety protocols. However, the rising coronavirus cases failed the government assumption of economic revival as expected. The closure of industries and businesses made more than 569,653 people lose their jobs, though the then finance minister Dr Yub Raj Khatiwada had been claiming of not very big impact on economy. 

According to the FCGO, the government has spent some 4.26 per cent to Rs 15 billion capital expenditure earmarked for the first quarter. Generally, the first quarter witnesses very less capital expenditure in any fiscal year.

The government is under heavy financial pressure as the revenue mobilisation has been tightly matching the recurrent expenditure and capital expenditure. “Unlike past fiscal years, the government is borrowing from the domestic market from the first quarter,” a Finance Ministry source informed, adding that the mismatch will be balanced by the domestic borrowing.

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